1225 REALTY OWNER LLC v. MOCAL ENTERPRISES INC

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Supreme Court, Appellate Division, First Department, New York.

1225 REALTY OWNER LLC, Plaintiff-Appellant, v. MOCAL ENTERPRISES, INC., et al., Defendants-Respondents.

Decided: October 29, 2009

SWEENY, J.P., BUCKLEY, DeGRASSE, FREEDMAN, ABDUS-SALAAM, JJ. Sukenik, Segal & Graff, P.C., New York (David C. Segal of counsel), for appellant. Kaye Scholer LLP, New York (Richard Seltzer and Daniel Forchheimer of counsel), for respondents.

Judgment, Supreme Court, New York County (Richard B. Lowe, III, J.), entered August 14, 2008, dismissing the complaint, pursuant to an order, same court and Justice, entered August 11, 2008, which granted defendants' motion to dismiss, unanimously affirmed, with costs.   Appeal from the aforesaid order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Plaintiff alleges that defendant Mocal fraudulently induced it to enter into a sale of two buildings at a purchase price of more than $92 million by inadequately disclosing the extensions of some of the tenants' leases.   Although sent with an email containing some 120 pages of documents, the revised rent roll containing the lease information was provided as a separate attachment and itself covered only 10 pages.   The revised rent roll was provided to plaintiff's counsel more than a month before the signing of the contract and also was attached as a schedule to the contract that plaintiff executed.   Both sides were sophisticated business entities, represented by counsel.

Accepting plaintiff's allegations as true and according plaintiff the benefit of every favorable inference (see 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 151-152, 746 N.Y.S.2d 131, 773 N.E.2d 496 [2002] ), we find that Mocal satisfied its duty to disclose the lease extensions, thereby foreclosing plaintiff's claim of fraudulent concealment (see Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 322, 184 N.Y.S.2d 599, 157 N.E.2d 597 [1959] ).

Plaintiff's inability to demonstrate fraud is fatal to its claim for reformation based on unilateral mistake (see Barclay Arms v. Barclay Arms Assoc., 74 N.Y.2d 644, 646, 542 N.Y.S.2d 512, 540 N.E.2d 707 [1989];  Greater N.Y. Mut. Ins. Co. v. United States Underwriters Ins. Co., 36 A.D.3d 441, 443, 827 N.Y.S.2d 147 [2007] ).